South Asia can become an energy hub: Anil Ambani

In Delhi to attend the Hindustan Times? Leadership Initiative, Anil D. Ambani, vice chairman and managing director Reliance group of companies, spoke to Sandeep Bamzai on how South Asia can be transformed into a regional energy hub.

Anil D. Ambani, vice chairman and managing director of the Rs 80,000 crore Reliance group of companies, was recently voted MTV Youth Icon of the Year. In Delhi to attend the Hindustan Times’ Leadership Initiative, he spoke to Sandeep Bamzai on how South Asia can be transformed into a regional energy hub. Excerpts:

In your speech, you said India has the potential to become a major energy hub in this part of world. Could you elaborate?

First, energy and infrastructure are two critical components for any growing economy. If you want to grow consistently at 7 or 8 per cent per annum, you don't have a choice but to shore up these areas. Second, we have the resources to produce a lot of energy at globally competitive prices. There is also an urgent need to optimise utilisation of resources in South Asia to remain competitive in the global market vis-a-vis China.

Look at Nepal and Bhutan. Each of them requires less than 100 MW power, but have the capacity to produce more than hundred-thousand MWs. If Indian entrepreneurs produce energy in these countries and import it to India at low cost through a national grid, it would benefit all. The same can be said for gas in Bangladesh. Indian investment in these areas can draw power and gas to India. But the question is do we have the political will to initiate a dialogue on these issues. For 10 years, we have been trying to do business with Nepal to tap their hydro electric power.

What is preventing us from doing this?

The basic issue is to harness natural resources and use them in the most productive manner at the most competitive price. In the energy sector, this can be done by importing energy into our national grid and supplying it to power deficient areas. Let me give you some statistics: If you spend $9 billion a year on physical infrastructure, it will fuel GDP growth by at least 1.6 per cent per annum. If you cut defence expenditure by 5 per cent, it will give you $8 billion to plough back into physical infrastructure.

In the recent past, we have seen some of the credit institutions facing difficulties and the government stepping in to bail them out. Is there a need for another credit institution?

I strongly believe that the government will have to play a crucial role in alleviating poverty. Remember, this part of the world is one of the poorest. We need a dedicated institution that will cater to the need of the poor. Once the poor are empowered, they will migrate to a better class of society. This will enlarge the market size.